SMOC vs. Framingham: A legal primer

Since it was filed more than a year ago, the federal suit brought by South Middlesex Opportunity Council against the Town of Framingham and some of its leading officials has been among the most controversial and expensive in recent memory. While the suit has sparked extensive and often emotional public debate, its legal un...

Since it was filed more than a year ago, the federal suit brought by South Middlesex Opportunity Council against the Town of Framingham and some of its leading officials has been among the most controversial and expensive in recent memory. While the suit has sparked extensive and often emotional public debate, its legal underpinnings are little understood by many of those not directly involved.

To help bridge this information gap, attorney and longtime town official John M. Kahn offers the following explanation of the law, the legal parties and the arguments presented to the court.

John Kahn served as the selectmen's appointee to the SMOC Board in 1972 and 1973. He is an elected Framingham member of the Joseph P. Keefe Regional Vocational School Committee. He has served as Framingham town counsel, town moderator and selectman. He has been a member of the Finance Committee and the Zoning Bard of Appeals. He has no connection with SMOC or any of its agencies or services.

1. Overview

By John Kahn

GUEST COLUMNIST

For nearly a year and a half South Middlesex Opportunity Council and one of its sister corporations (together "SMOC") and the Town of Framingham and various elected and appointed officials ( together "the Town") have been embroiled in a lawsuit brought by SMOC in the federal District Court in Boston. The essence of the suit is the claim by SMOC that the Town and its officials have "joined in a coordinated effort to rid the Town of Framingham of its disabled population..." SMOC alleges that:

"...as their means toward this illegal goal, Defendants have taken aim at various nonprofit social service agencies that dare to care for and assist this population. Via unlawful threats, intimidation and coercion designed to interfere with the provision of basic housing and social services to the disabled, Defendants have deprived this vulnerable population of their basic civil rights."

As instances of the Town's alleged illegal practices, SMOC cites the Town's efforts "to impede or eliminate" SMOC's assisting disabled persons to "move forward in their recovery and re-integration." SMOC refers in particular to two facilities, Sage House and Larry's Place, for which the local permitting processes have been delayed or "stalled altogether."

SMOC's stated objective is to put a stop to the continuation of the alleged practices. It asks the court for several different forms of remedial action which include:

Page 2 of 8 - -- "that the Court take supervisory authority and jurisdiction over the Town's...actions to ensure compliance with the federal Fair Housing Act, the Americans With Disabilities Act, the federal Rehabilitation Act, the Dover Amendment, and all other applicable federal and state laws."

-- Monetary damages for deprivation of federal and state statutory rights;

-- An order that the Town refrain from impeding, delaying or interfering with the siting or operation of the Sage House Program;

-- An order that the Town issue within 10 business days all permits and licenses needed for the opening and operation of Larry's Place;

Lawsuits against the Town are not uncommon. According to the most recent published report of the town counsel during the year 2007 some 40 suits were in various stages of litigation. The most frequently occurring involved zoning and labor issues. Three, including the SMOC suit, involved claims of civil rights violations.

Of those 40 cases it is doubtful that anyone other than the parties themselves is even aware of their existence or what led them to the courthouse. What is it about the SMOC case that has aroused such public interest? Is it the pre-eminence of SMOC as a social service provider in the town? Is it the expense anticipated to be incurred by all parties? Is it the personal element introduced by claims for damages against volunteer public officials? Is it the temerity of a highly visible tax exempt organization seeking to coerce the town to recognize an obligation to the "disabled" population?

This extended essay will address some of the issues suggested by those questions. They will describe the status of the SMOC litigation; the legal basis for the major claims and defenses; the nature of the relief sought; including damages and the claim for ongoing judicial supervision over the Town; the risk of personal and uninsured liability of the town officials in charge of key decisions in the handling of the case; the difficulty inherent in balancing appropriate public transparency against confidentiality in developing litigation strategy; and other related matters.

2. The plaintiffs

In SMOC we see a local community action agency with its origin in the federal legislation of the Kennedy and Johnson administrations. SMOC's original goals were focused on involving low-income people in developing and executing anti-poverty programs and coordinating efforts with other agencies to avoid duplication and improve delivery of services. Over the years SMOC's view of its role has come to include "organizing resources for social change and economic independence." To accomplish its goals SMOC sees itself as representing and advocating for low-income and disadvantaged people and by itself providing direct services to its constituents ranging from family and nutrition, mental health and substance abuse, energy and financial assistance, and economic development.

Page 3 of 8 - To manage its operations SMOC relies on its executive director and a chief financial officer and for policy development, including approval of program proposals, on a board of directors with approximately 30 members. In prior years the directors included members appointed by the selectmen of SMOC's service area towns. Under SMOC's current by-laws these "public members" must equal one third of the board and the board itself appoints them. They may serve without term limits at the pleasure of the board.

The board employs the executive director, elects its officers and appoints an executive committee which transacts business between board meetings. Directors, unlike public officials, are not subject to the state's "conflict of interest" law and may, after disclosure, participate within limits in discussion of matters in which a possible personal conflict of interest exists. The corporation must permit the public to attend board meetings and have access to certain of its records. The corporation files IRS Form 990 "Return of Organization Exempt From Income Tax."

SMOC's tax filings for its fiscal years beginning July 1, 2000, through 2006 provide some insight into the changes in its operations and resources over those years. SMOC's main source of revenue increased by nearly 25 percent to nearly $46 million dollars. Its net assets at year end increased by nearly 35 percent to slightly over $4 million dollars. The compensation of its five highest paid employees increased by nearly 20 percent to $480,000.

SMOC's executive director's compensation (including benefits contribution) increased by 60 percent to $266,764, keeping annual pace approximately with the grown in SMOC's program service revenue. For comparison, that sum is higher than the amount of salary paid to any of the top five paid professional employees of the Town.

The tax filings show amounts paid to business entities in which two of SMOC's directors have financial interests. The chair of the board is an employee of a family-owned insurance agency with which SMOC incurred insurance expense of nearly $200,000 in the fiscal year ending June 30, 2007. The clerk of the board is a partner in a law firm that represents SMOC and its related entities and with which in that year SMOC incurred legal fees of $450,861, net of discounts totaling $157,960. In each case SMOC's tax filings state, "All fees paid for services rendered were reviewed during our audit. They were judged to appear reasonable and appropriate in the normal course of business at market rates. Business policies and procedures were consistent and applied in connection with aforementioned transactions."

3. The defendants

SMOC's complaint charges the Town and 15 individuals, including the town manager, elected officials, Town Meeting members and two residents with infringing rights under federal and state statutes (referred to as civil rights laws) and two claims under non-statutory law relating to conspiracies to violate those laws and defamation of character.

In September 2008 the court acted on motions of some of the defendants to dismiss some of the claims against them. There remain intact, for the present, claims against the Town under the federal Fair Housing, Americans With Disabilities, and Rehabilitation Acts. Also remaining are claims under the Fair Housing Act against the three Town Meeting members, the Town's human relations coordinator and the four defendant selectmen, and the four defendant Planning Board members. Also remaining are claims for defamation against the three Town Meeting members and two of the selectmen. No claims against the town manager remain in the case.

Page 4 of 8 - In summary, the Town itself, four selectmen, four Planning Board members, the three Town Meeting members and the human services coordinator remain defendants in the case. According to the court records, 16 lawyers are engaged in the defense of one or more of those defendants. The Town purchases a public officials liability policy covering the cost of defense and damages subject to certain conditions and limits.

SMOC's complaint alleges that the Town, "...knowingly and willfully" and/or "with reckless disregard" violated the rights of SMOC and the population it serves. That conduct involves interfering with the rights of handicapped persons to "use and enjoy housing," excluding SMOC and the disabled population and denying them the benefits of the Town's zoning, building permit and related activities and "by preventing and/or delaying the operation of the Sage House Program and Larry's Place." SMOC claims that all of these acts were done by the individual defendants acting as town officials.

The SMOC suit also names the Town's Human Services Policy and Program Coordinator. This position was created in 2007 on the recommendation of the committee studying the issue of voluntary payments in lieu of taxes by non-profit landowners. The PILOT committee recommended that, "The primary role of this position is to act as an advocate fulfilling the Town's interests in the state social services delivery system." The coordinator reported to Town Meeting in 2007 that she "...represent(s) the Town regarding current and prospective human service programs in Framingham and serve(s) as a liaison among the Town, the state, and the human service agencies that are located in Framingham."

On March 2 all defendants filed motions for summary judgment together with supporting memoranda of law, affidavits, deposition excerpts and a 154-page statement of undisputed facts. These motions bring before the judge the question whether, on the basis of the facts presented, there are any genuine issues of material facts for trial, in this case before a jury. SMOC, if it chooses to oppose these motions, must by its own affidavits and supporting documents show that there are indeed material facts in genuine dispute. If SMOC shows by affidavits that for specific reasons it cannot present facts essential to justify its opposition to the motions the judge may deny the summary judgment or delay the proceeding to allow SMOC to obtain the opposition material that is shown to be lacking.

The parties' individual motions for summary judgment each focus on the claims asserted against them. Without attempting to summarize the details of each motion they include: that the individuals for whose benefit SMOC sought to act are not within the protection of the Disabilities, Rehabilitation, or Fair Housing Acts; that SMOC itself was responsible for such delays in process that it encountered; that individual defendants played no part in the conduct complained of; that statements made are either not defamatory, being matters of opinion only, are true statements made without malice or are the protected exercise of free speech.

Page 5 of 8 - The granting of a motion for summary judgment on a claim effectively eliminates that matter from trial. Summary judgment may be granted on some but not all claims thereby reducing the scope of the subsequent trial. Even if summary judgment is not granted, the judge may determine during the process that certain material facts are not genuinely in dispute and eliminate the need to prove them at trial.

4. The allegations

The Golden Rule "Do unto others..." offers moral guidance, but not much help as to specifics. For rights and wrongs in any particular context we look to the statute books, the common law and what the courts tell us we must and must not do.

Judge Douglas Woodlock in September, in a 60-page decision, discussed the sort of misconduct that SMOC must prove to win. The summary of the Court's reasons for permitting SMOC's Fair Housing Act claims against the individual defendants and the defamation claims to proceed are drawn largely from the judge's decision. The Town is named as a defendant in Counts II, (Fair Housing Act); III (Americans With Disabilities Act); and IV (Rehabilitation Act). The Town did not move to dismiss these counts. They remain in the case and are described below.

SMOC's complaint, in some 90 pages, alleges a course of action by the Town and the individual defendants. It alleges that the intended result of that conduct was to violate federal and state law and to cause harm to persons who benefit from SMOC's programs, in particular Sage House and Larry's Place.

Count II of the complaint against the Town and individual defendants relies upon the federal Fair Housing Act, which prohibits discrimination in the sale or rental of dwellings based on race or color, religion, sex, national origin, familial status or disability of the buyer or renter. It also prohibits coercion or other interference with the exercise of rights under the act. Even misconduct that is limited to speech and petitioning, sustained and pervasive efforts by individuals to persuade town officials to knowingly exceed the limits of their authority and not to act favorably on SMOC's applications would violate the act.

Count III, against the Town alone, relies upon the Americans With Disabilities Act, which prohibits discrimination on the basis of disability in employment, government, public accommodations, commercial facilities, transportation and telecommunications. Persons protected by the act must have a physical or mental impairment that substantially limits one or more major life activities, or have a history of such impairment or be perceived by others as having such impairment. The act does not list all the impairments that are covered and, with respect to employment applies only to employers with 15 or more employees.

Count IV, also against the Town alone, relies upon the Rehabilitation Act, which gives civil rights protection to individuals with disabilities that are similar to those covered by the Disabilities Act described above. Its application extends to programs receiving federal financial assistance and prohibits the exclusion of or denial of benefits or discrimination under any program that receives federal financial assistance.

Page 6 of 8 - Count VII, against two selectmen and three Town Meeting members, asserts a claim for defamation. Defamation, also referred to as "libel," has five elements: (1) transmission of a written statement to one person other than the plaintiff; (2) of and concerning the plaintiff; that was both (3) defamatory, and (4) false; and (5) either caused economic loss, or is actionable without proof of economic loss.

Deferring the question of damages, at issue in the SMOC case is whether the statements were defamatory and false. Statements are defamatory if they would tend to hold the person spoken of up to scorn, hatred, ridicule or contempt in the minds of any considerable and respectable segment of the community. The decision whether a statement is reasonably susceptible of a defamatory meaning is up to the judge. Judge Woodlock in his September ruling found that a reasonable person could conclude that they did convey a defamatory meaning and that they were not purely expressions of opinion but were, at least, statements of mixed fact and opinion whose truth or falsity could be proved. Consequently, the defamation claim remains in the case.

5. The end game

Going to court in a bitterly contested matter such as the SMOC suit is not unlike going to war, diverting money and human energy from more productive primary goals. Institutional reputation and public perception of individual character ride on the outcome.

Pursuing the analogy to war reminds thoughtful people of the comment of Sir Winston Churchill: "Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter. The statesman who yields to war fever must realize that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. ... Always remember, however sure you are that you can easily win, that there would not be a war if the other man did not think he also had a chance."

These comments have not attempted to forecast the progress or the outcome of the SMOC suit. There are, however, reasons for public concern that could benefit from a candid discussion in an open forum by the parties, informed residents and taxpayers. Topics might well include the following and others whose discussion would not require disclosure of the jealously guarded, "litigation strategy."

-- The taxpayers' money. Town Meeting to date has authorized spending on this matter $400,000. In response to a formal Freedom of Information Act request the town manager has stated, "The Board of Selectmen has not waived the attorney-client privilege [as to legal bills paid by the Town or the Town's insurance company] and has been advised by Town Counsel and Special Counsel not to waive such privilege." The Selectmen's longstanding policy establishing a Litigation Liaison Committee with the Finance Committee, the Town Manager and Town Counsel for the purpose of "ensuring that Town funds devoted to litigation matters are prudently expended" has been ignored despite the provision that discussion of litigation-related expenses may be held in executive session.

Page 7 of 8 - The Town's and individual defendants' financial risk. SMOC's complaint asserts that all or some of the defendants acted "knowingly and willfully...and/or with reckless disregard"" to violate the plaintiffs' rights. If proved, that assertion would be the basis for imposing punitive damages on the defendants. "Punitive" damages are intended to discourage future wrongdoing and to punish past misconduct. Within limits, they may be any amount necessary to discourage and punish. Compensatory damages are intended to cover monetary losses plaintiffs' may have suffered. Unlike punitive damages, compensatory damages must be proved as to amount and as to how they were caused by the misconduct. Under state law and the Town's Public Officials Liability policy, punitive damages for knowing and willful violation of rights (although not for "reckless conduct") as alleged by SMOC are not covered by insurance. Payment of punitive damages would be the personal liability of individual wrongdoers, including in this case three selectmen under Count II (Fair Housing Act).

The judge has already expressed his frustration with the volume of paper generated by all parties. He has recently suggested that conscientious attorneys, acting in their client's best interest, should be able to responsibly resolve procedural matters without bringing issues unnecessarily to the court.

--The possibility of a settlement. Whether a dispute that involves more than money can be resolved depends as much on the will of the clients and lawyers as it does on the nature of the relief sought. Here, based on SMOC's recitals, including a request for ongoing "supervisory jurisdiction" over the Town's actions to ensure compliance with applicable federal and state law the settlement prospects seem dim.

Stepping back, however, there are certain immutable facts that both SMOC and the Town must realistically acknowledge and which might prompt a discussion, devoid of ego and rancor, leading to resolution:

The clients whom SMOC serves, whatever their community of origin, will always be in need of service from some public or private provider.

No community can support indefinitely the inexorable expansion of social service agencies and facilities regardless of their impact on the infrastructure and municipal services.

Any activity, public or private, that serves the general good of the populace frequently impacts more heavily on some particular segment of the community than on community at large. Equity and fairness require some means of moderating inordinate impacts of that sort.

As suggested by Sir Winston, the risk of an adverse outcome falls to some degree on either or all parties to a litigated dispute.

The greatest likelihood of achieving a viable result in this dispute, as in any other, lies in an agreed adjustment among the parties who best know what is essential to their survival rather than a judicial imposition that satisfies neither one or the other, all to the ongoing distress of both.

Page 8 of 8 - SMOC Directors, Town Meeting members and officials are all charged with a similar responsibility: to provide the leadership to achieve their goals without tearing the fabric of our community so as to encourage and unleash the most fearful and destructive forces that await the opportunity to emerge and flourish among us. Unless they play their roles effectively they surrender to those forces.